Light Reading
Samsung Electronics may be the global leader, but the smartphone market isn't growing as fast as it was...

Samsung Suffers Smartphone Slowdown

Ray Le Maistre
7/8/2014
50%
50%

Samsung Electronics gave a reminder of the smartphone market's volatility early Tuesday by announcing that it expects to report second-quarter sales of about 52 trillion Korean won (US$51.4 billion) and an operating profit of about 7.2 billion won ($7.1 billion), down 9.5% and 24.5% respectively from a year earlier.

The company cited increased competition in China, slower smartphone market growth, a build-up of device inventory in Europe, and a strong Korean Won as the factors affecting its anticipated second-quarter numbers. It also noted, though, that it expects a more positive third quarter.

That may be optimistic: As this Reuters report shows, Samsung Electronics Co. Ltd. (Korea: SEC) is likely to come under even greater pressure in the coming months from aggressive smartphone rivals and the anticipated launch of Apple Inc. (Nasdaq: AAPL)'s next device (the successor to the iPhone 5).

However, Samsung's share price edged up on the Korean exchange to 1.295 million won as investors kept faith that the company would improve its margins.

Samsung may be the global smartphone market leader, but it is set to come under sustained pressure in the mass-market smartphone sector from the likes of Huawei Technologies Co. Ltd. , Lenovo Group Ltd. (Hong Kong: 992), Xiaomi and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763), among others -- maybe even Microsoft Corp. (Nasdaq: MSFT). (See China Smartphone Star Eyes US Market , Huawei Handset Man Jumps to Lenovo, Microsoft's Elop Denies He Was a Trojan Horse , Huawei Boss Tells Handset Team to Sober Up, and Asia Strengthens Its Grip on Smartphone Market.)

It should also be noted that Samsung caused similar jitters a year ago with a similar financial report, but it's unlikely to become the next BlackBerry any time soon. (See Samsung Guidance Causes a Stir and BlackBerry Q4 Sales Sink to Sub-$1B.)

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

(9)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
mhhf1ve
50%
50%
mhhf1ve,
User Rank: Light Sabre
7/9/2014 | 9:53:26 PM
Everyone in this market is entering the "plateau of productivity"
Hasn't the tech market seen this happen before? PCs had a huge spike.. and then leveled off and then now desktop sales are steadily declining... but not going away entirely (yet?). Smartphones and tablets and wearable or whatever comes next will likely follow similar paths as the market saturates and consumers can only own at most 2-3 smartphones simultaneously.... 
DOShea
50%
50%
DOShea,
User Rank: Blogger
7/9/2014 | 5:49:21 PM
Maybe not the next BlackBerry...
...but still, changes ahead? http://online.wsj.com/articles/foreign-investors-put-pressure-on-samsung-1404758013

 
kq4ym
50%
50%
kq4ym,
User Rank: Light Sabre
7/9/2014 | 9:09:17 AM
Re: Samsung factory robbed
Even a large heist in Brazil should not put that much of a dent in profits and sales. But Samsung is certainly suffering the results of increased competition in the industry. And it may not be a trend we see in the reduced profits but just a glitch in the normal ups and downs of sales.
Susan Fourtané
50%
50%
Susan Fourtané,
User Rank: Blogger
7/9/2014 | 5:31:31 AM
Re: Samsung factory robbed
Kruz, 

Samsung made refernece to a decrease in sales of its high-end devices affecting both revenues and profits.

If we consider just the three new high-end devices Samsung launched since January, and then we consider the many consumers who are waiting for Apple's September announcement we can conclude that the possibilities of Samsung's sales being successful were not high.

And I am not even starting with the other six devices. Samsung is focusing in quantity, not in quality. Some people still appreciate quality in the first place.

-Susan   

 
Kruz
50%
50%
Kruz,
User Rank: Light Sabre
7/9/2014 | 4:08:56 AM
Re: Samsung factory robbed
Its also due to the fact that the Korean currency is doing very well and that tablets are not that frequently replaced when compared to tablet PC. The phablets are also negatively affecting the tablets, especially in 3rd world countries.
Susan Fourtané
50%
50%
Susan Fourtané,
User Rank: Blogger
7/9/2014 | 3:55:07 AM
Re: Samsung factory robbed
Kruz, 

If the robbery took place at the time of the game plating at the moment --which most likely did-- they had a least two to three hours to load all the devices and disappear. 

Samsung's slowdown was way before that, of course. Releasing nine new tablets in all low, mid, and high-end cathegories since January probably contributed to the slow down. That's too many new products in a very short time. There is no way it could have worked well. 

-Susan
DHagar
50%
50%
DHagar,
User Rank: Light Sabre
7/8/2014 | 7:48:27 PM
Re: Samsung Factory Robbed
@Kruz, Incredible!  That must have taken a long time - they must have timed that to the World Cup, or something that would allow enough time to not be discovered.

To Ray's point though, it does make sense that the overall market growth would not keep the high-paced growth trajectory it was on.  Now, the competition will get stiffer.

I'm with you though, I have noticed the pictures are Samsung - I think they will do OK!
Kruz
50%
50%
Kruz,
User Rank: Light Sabre
7/8/2014 | 9:18:59 AM
Samsung factory robbed
I might have an answer for Samy's slowdown. It's brazilian factory was robbed yesterday; a 36 millions worth of goods :) I wonder how much time it took them to load smartphones or tablets worth that amount!
Kruz
50%
50%
Kruz,
User Rank: Light Sabre
7/8/2014 | 9:16:26 AM
MSFT?
I dont see MSFT causing a threat to Samy anytime soon. LG possibly with its latest flagships or the excellent Xperia Z phone series.

Has anyone noticed that during the WC, whenever a random spectator holding a phone and taking a picture is photographed, it's a Samsung?
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Huawei Video Resource Center
Interview With Rick Talbot, Principal Analyst, Current Analysis

10|31|14   |   2:12   |   (0) comments


At the NFV Open Cloud Forum 2014, Rick Talbot shared his positive feedback about the holistic and open approach that Huawei adopts for SDN and NFV. He also found the open sharing at the event valuable as it features different perspectives from Huawei experts, telecom operators, industry analysts as well as security experts.
LRTV Huawei Video Resource Center
Interview With David Snow, Principal Analyst, Current Analysis

10|31|14   |   2:24   |   (0) comments


David Snow talked about his understanding of Huawei and its SoftCOM strategy at the NFV Open Cloud Forum 2014, saying that Huawei's wide approach combining IT and CT expertise, introducing big data and analytics into solutions and contributing to the OpenStack community particularly resonate with him and make the company stand out in the industry.
LRTV Huawei Video Resource Center
Interview With Roz Roseboro, Senior Analyst, Heavy Reading

10|31|14   |   3:13   |   (0) comments


Roz Roseboro commented on Huawei's data center capabilities and NFV solutions at the NFV Open Cloud Forum 2014, saying that in addition to covering all three key domains of compute, storage and networking, the company also emphasizes the importance of management capabilities and professional services, which are essential in making NFV a reality.
LRTV Huawei Video Resource Center
Interview With Michael Howard, Co-founder & Principal Analyst, Infonetics Research

10|31|14   |   5:25   |   (0) comments


Michael Howard talked about SDN, NFV, and OpenStack adoption at Huawei's NFV Open Cloud Forum 2014. Particularly, he pointed out that Virtual Enterprise CPE is the top NFV use case that operators plan to invest in over 2014 and 2015 to deliver new enterprise services through virtualized functions.
LRTV Huawei Video Resource Center
Interview With Jerry Caron, Senior Vice President, Current Analysis

10|31|14   |   3:11   |   (0) comments


At Huawei's NFV Open Cloud Forum 2014, Jerry Caron from Current Analysis said that orchestration and management are key to realizing SDN and NFV for global carriers, and the approach that Huawei is taking, with its FusionSphere Cloud OS at the core, is in the right direction to address the challenges.
LRTV Documentaries
Broadband Battles

10|31|14   |   01:39   |   (0) comments


This year's Broadband World Forum featured a number of show floor battles focused on access gear, components and coffee.
Jonestown
Mobile Backhaul: Going to the Dark Side?

10|30|14   |   2:26   |   (1) comment


Heavy Reading's Patrick Donegan shares his view on a dark trend that bubbled up at Light Reading's annual backhaul conference in NYC.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With CEO of SwitchCom

10|30|14   |   4:13   |   (0) comments


SwitchCom, an IT company based in Angola, recommends a variety of Huawei solutions and hardware to their customers in the energy industry.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Ethiopia's Ministry of Water Irrigation & Energy

10|30|14   |   4:08   |   (0) comments


Gosaye Mengistie of Ethiopia's Ministry of Water Irrigation & Energy discusses the collaboration with Huawei in that country.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Dongfang Electronics Corporation

10|30|14   |   5:46   |   (0) comments


Dongfang Electronics Corporation, headquartered in Chengdu, China, is one of China's largest manufacturers of power generators and contractors of power station projects.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Zimbabwe's Customers

10|30|14   |   3:31   |   (0) comments


Representatives of Zimbabwe's Ministry of Power and Development discuss the energy needs of their country as well as new areas of improvement due to enhanced ICT capabilities.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Colbún Chile

10|30|14   |   4:29   |   (0) comments


In Chile, an aging energy infrastructure was in dire need of a modern update. Claudio Valenzuela of Colbún discusses how Huawei's ICT solutions continue to provide crucial information to improve the grid and how an in-country engineer is a cricial asset.
Upcoming Live Events
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
May 6, 2015, McCormick Convention Center, Chicago, IL
May 30, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Microsoft's Skype Embraces WebRTC on IE
Sarah Reedy, Senior Editor, 10/27/2014
FTC Slaps AT&T With Throttling Lawsuit
Sarah Reedy, Senior Editor, 10/28/2014
Wheeler Gets Down With OTT
Mari Silbey, Independent Technology Editor, 10/29/2014
China's MVNOs Hit the Wall
Robert Clark, 10/27/2014
Let's Not Kill SDN & NFV With Silos
Francois Locoh-Donou, Senior VP, Global Products Group, Ciena, 10/28/2014
Like Us on Facebook
Twitter Feed